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HOW THE COMPANY INTEGRATED SIX SIGMA AND LEAN PRINCIPLES FOR MAJOR RESULTS.
Honeywell International Inc. is a $24 billion diversified technology and manufacturing leader, serving customers worldwide with aerospace products and services; control technologies for buildings, homes and industry; automotive products; power generation systems; specialty chemicals; fibers; plastics; and electronic and advanced materials. In 2002, Honeywell had $1.2 billion in productivity improvement gains. A sizable portion of that came from its variation and waste reduction efforts, commonly referred to in the company as Six Sigma Plus.
Six Sigma Plus is the marriage of traditional Six Sigma variation reduction deployment and waste reduction efforts from the process streamlining methods of Honeywell's lean enterprise deployment. Lean enterprise covers waste and cycle time reduction in all processes, including those in manufacturing and business. Similarly, the Six Sigma strategy spans all processes from supply chain, revenue chain, product design, marketing, growth and manufacturing.
Since fourth quarter 1994, Honeywell has implemented a succession of major initiatives to deploy both Six Sigma and lean enterprise principles. The impact through 2001 has exceeded $3 billion in financial benefits. A quote from Honeywell's 2001 annual report regarding Six Sigma Plus reads, "Here Six Sigma isn't just a statistical measure or a wall plaque; it's part of our genetic code and the source of our common vocabulary. It's also a powerful contributor to our success. We estimate Six Sigma has saved us $3.5 billion since 1995."'
Terminology
As is well known to readers of this magazine, Six Sigma is a strategy for cost reduction and growth via a focus on variation reduction in processes. It is also a metric. A process that yields only 3.4 defects per million opportunities rolled through all its steps is referred to as a Six Sigma process. This involves an extensive effort to identify and eliminate the sources of variation. In a sales revenue process, for example, it can include errors in the invoicing of a shipment to a customer, late shipments, returns because of defective products and late account receivables.
Six Sigma methodology employs a roadmap consisting of five phases: define, measure, analyze, improve and control (DMMC).2, 3 Statistical and quality tools can be used to properly plan, collect and analyze data for proper execution of...